High-court ruling thwarts ERISA stock-drop lawsuits
American Benefits Council s Jan Jacobson
More than six years after the U.S. Supreme Court issued a unanimous ruling on how courts should handle stock-drop cases, defined contribution participants claiming ERISA violations are struggling to vault the high hurdle set by the court.
Since the 2014 decision in Fifth Third Bancorp et al. vs. Dudenhoeffer et al., the annual number of stock-drop suits being filed has declined, especially when compared to the annual filings during and following the Great Recession.
Many U.S. District Court judges have dismissed ERISA complaints as they abide by the Dudenhoeffer guidelines. A handful of appeals courts have reversed lower court dismissals. For those few lawsuits that climbed the litigation ladder to the Supreme Court, the justices have shown little desire to review or revise the standards for determining if a stock-drop complaint should be dismissed or allowed to go to trial.